What is a limited company?
A limited company refers to a legal structure of operating a business whereby ‘the company’ (i.e. business vehicle) is separate from its owners. The business structure is incorporated at Companies House as a legal person. The characteristics of a company are that: it is owned by one or more shareholders; one or more directors are appointed to run the day-to-day operations and every company must have:
a) Memorandum of Association; and
b) Articles of Association
The Memorandum is the document that sets the company up and the Articles of Association sets out how the company will be run, governed and owned. Unlike running a sole trader business, there is a clear separation between ownership and operation i.e. the owner of the company (shareholder) may not necessarily be in charge of running the company (director) and this gives rise to Agency Theory.
As a separate legal entity, a company can enter into contracts in its own name and is responsible for its own finances, actions and liabilities. Why choose Limited Company over Self-Employment in our Insights section outlines some of the key benefits and drawbacks of operating your business as a limited company. It is important to outline the difference between a public limited company and a private limited company. A private limited company is one that is registered and owned by private individuals that make all the decisions in relation to the company and a public limited company is registered on the stock exchange (where the general public can invest in the company).
Why Choose Jaki & Son for a Limited Company Structure?
Jaki & Son Ltd specialises in providing small businesses with accountancy support particularly small companies. Our CEO, Vuyo Stamper, spent 3 years analysing the accountancy industry through his dealings with accountants as a Finance Manager for the family business. He noticed that many accountancy firms focused on providing a reactive service rather than a proactive service. This primarily refers to the fact that many small businesses often see their accountants once or twice a year i.e. when it is time to submit their records for tax purposes. Our CEO believes that accountants are not just service providers – they are valuable partners. This means that there needs to be flexibility in the type of services we can provide in order to cater for different businesses as well as industries.
In addition, many business owners simply do not understand that value that their accountant can provide which is why we have an Insights section dedicated to answering key accounting questions through a series of articles. We create value by taking the time to understand your business rather than just telling you what we can offer. We can deliver an end to end accounting service from just £65 per month for the first year (see Accountancy Packages for more details). To speak to someone about what Jaki & Son Ltd can offer your limited company, Contact Us today for a free consultation.